If advertising keeps me from paying for Web content, fine. Just don't throw it in my face.
That seems to be the prevailing attitude of Internet users today, judging from the latest study of online usage released last week by Arbitron and Edison Media Research. The findings suggest placing messages before or during streaming media may be an effective communications option in $6 billion-plus online ad market.
Based on data from "Internet and Multimedia 11: New Media Enters," a phone survey of 2,000 Americans conducted in July, some 50 million Americans used Internet audio or video within the month leading up to the study. A solid majority of respondents—61 percent who tune to Internet audio and 59 percent who watch Internet video—prefer free-programming models supported by ads over subscription and other models.
"New technologies such as satellite radio, PVRs and DVDs have become part of mainstream consumer habits," noted Larry Rosin, Edison Media's president. "And those habits will determine the patterns of advertising that they will respond to."
However, the survey reveals a continuing frustration with many forms of online ads: One-quarter of respondents who have Internet access at home said they use software to block certain forms of Web ads. Pop-ups were singled out as particularly intrusive and annoying. Consumers have been conditioned by nearly two decades of VCRs and the mainstreaming of personal computers and cell phones to demand that their media be flexible and instantly responsive to their needs, said Bill Rose, vp and general manager of Arbitron Internet Broadcast Services.
The aversion to pop-ups presents an opportunity for Internet broadcasting, Rosin said. "For sites offering streaming content, a commercial is not as intrusive, since people are used to it from watching TV," Rose added.
With banner ads' click-through rate continuing to decline—just 12 percent of respondents said they clicked on one in the previous month, compared with 30 percent in a similar study in 2000—the growth of broadband, which makes streaming media more accessible, could be online advertising's saving grace.
"In the cases of media such as TV, there is a tacit quid pro quo that consumers have accepted: 20 minutes of ads for 40 minutes of content," said Greg Stuart, president and CEO of the New York-based Interactive Advertising Bureau. "That model holds a lot of promise for online advertising."
Mike Bologna, manager of emerging media for WPP Group's Mediaedge:cia, pointed to TiVo as an example of innovative thinking in another challenging ad environment, the PVR. "Through its opt-in Showcase feature, TiVo has found a way to make advertising relevant to its users, and as more Internet sites employ streaming media, they'll be able to do the same," he said.